Apollo Global Management (NYSE:APO) announced that its private credit fund, MidCap Financial Investment Corp. (NASDAQ:MFIC), has reduced its dividend and re-evaluated its asset values, due to challenges in certain segments of its loan portfolio.

MFIC is resetting its payout strategy, slashing its quarterly dividend from 38 cents to 31 cents per share. The direct lender also reported a roughly 3% markdown in its asset base, attributing the move to underperforming legacy loans and a shifting interest rate environment, Bloomberg reports.

Commenting on the Company's results for the fourth quarter of 2025, Tanner Powell, CEO said: "We delivered solid net investment income in the fourth quarter. The overall portfolio continues to show resilience as evidenced by our relatively steady credit metrics. In light of changes in base rates and other factors, we have re-assessed the long-term earnings power of the Company, and the Board has concluded that it was prudent to adjust the dividend at this time.”

They also revealed a new $100 million stock repurchase plan authorized by its Board of Directors.

"With respect to software, our exposure is meaningfully lower than the broader BDC industry. As of Dec. 31, 2025, software represented only 11.4 percent of MFIC's portfolio at fair value. We have constructed a portfolio that we believe is relatively resilient to AI-related risks, with an emphasis on businesses that have long-standing, entrenched customer relationships," Ted McNulty, the company's president and CIO said.

As reported by Bloomberg, private credit managers are facing increased scrutiny from investors concerned about their exposure to the tech sector, particularly due to disruptions caused by artificial intelligence.

Midcap Financial's stock is down 8.5% on Friday and down 14.5% this month. Meanwhile, Apollo's stock is down 20% this month, its worst performance since 2011.

Image by Piotr Swat via Shutterstock

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